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15 Cheapest States To Live In

Let’s face it. The cost of living, for many people, has gone through the roof. Some individuals are even considering moving and are searching for a cheaper state to live in. No matter which state you’re looking to live in, you should consider your budget, housing, and lifestyle needs if moving to an alternative state.

We’ve compiled a list of the top 15 cheapest states to live in the U.S. These states offer a range of affordable options for those looking to save money and make the most of their budget. They also have a low cost of living.

The Cost of Living Index

Researchers compile data based on significant living expenses to create the cost of living index. According to the U.S. Bureau of Labor Statistics (BLS), an average American household spends around $61,334 annually. This expense translates to $5,111 per month.

A cost of living index is crucial for any state as it helps track the rise in basic expenses over time. This index includes shelter, healthcare, energy, transportation, food, childcare, and clothing.

You can tell if a state is expensive or cheap to live in by comparing its cost of living index with the national average. If the cost of living index is higher than 100 (this is set as the base), you can consider living in the state expensive.

Cheapest States to Live In

Here are the 15 cheapest states to live in the US:

1. Mississippi

  • Cost of living index: 83.3
  • Median household income: $75,462
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Mississippi is another of the U.S. states with affordable living. With a cost of living index of 83.3 and the lowest housing and transportation costs, Mississippi should be on your list of the cheapest states to live in. The median cost of a single-family home in Mississippi is approximately $140,818, while the average monthly rent for a two-bedroom apartment is $991.

Besides the many benefits of living in Mississippi, there are also some drawbacks that you can’t ignore. Mississippi has the highest poverty rate and is severely ranked as the worst state to live in due to economic and educational reasons.


  • Low housing and transportation costs
  • Favorable weather
  • Plenty of comfort food


  • High poverty rate
  • Poor economic and education system
  • Consistently ranked as the worst state to reside in

2. Kansas

  • Cost of living index: 86.5
  • Median household income: $76,252
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Kansas is one of the states with the lowest unemployment rates in the U.S. If you are considering settling in an area with a stable economy, think no further than Kansas. You can easily penetrate the job market since there are several openings.

In addition, Kansas boasts the lowest housing costs. A single-family home, for example, costs around $176,898, lower than the national average.


  • Strong economy
  • Low unemployment rate
  • Lowest housing costs
  • Good food and barbeque


  • Most of the state is rural
  • Extreme droughts
  • Frequent tornadoes

3. Alabama

  • Cost of living index: 87.9                   
  • Median household income: $77,064
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Living in Alabama comes with many benefits, including its natural beauty. For a single-family home, you’ll enjoy an affordable median home price of about $170,184. Although many people here live below the poverty line, there’s a low unemployment rate of only 2.9%.

Besides, healthcare and transportation costs are lower than the national average. These factors make Alabama an attractive state to most people with families.


  • Affordable healthcare and transportation costs
  • Nearness to the Gulf Coast
  • Housing costs are lower than the national average


  • Swampy (up to 85% humidity levels) and hot summers (average temperatures around 90F
  • High violent and property crime rates
  • Substandard healthcare system
  • Poor public education system

4. Oklahoma

  • Cost of living index: 87.9
  • Median household income: $52,341
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Another cheapest state to live in is Oklahoma. Several factors, such as the low cost of healthcare, housing, and groceries, make Oklahoma among the most affordable states in the U.S. Living in Oklahoma allows you to enjoy all four seasons, including hot summers and mild winters.

The low cost of living in Oklahoma City can provide financial freedom as you can save a few bucks every month. However, the state has the highest poverty rates and has persistently ranked as the worst state to live in.


  • Affordable housing
  • Favorable weather
  • Low housing and grocery costs


  • Significantly higher poverty rates
  • Frequent tornadoes
  • Unstable healthcare and education system

5. Georgia

  • Cost of living index: 88.8
  • Median household income: $58,952
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The fifth cheapest state to live in is Georgia. It has considerably lower housing, transportation, and utility costs, and the overall cost of living here is relatively low. In fact, it’s one of the states with the highest housing affordability, with more than 40% being able to afford to buy a new house.

You can enjoy personal development in Georgia due to the various job opportunities. As a result, economic growth is rapid as most people work and pay taxes. You’ll also love the exceptional southern food in this state.


  • Diverse natural beauty
  • It’s near urban centers such as Savannah and Atlanta
  • Housing costs are lower than the national average (below 25.6%)
  • Utility costs are below the national average
  • Favorable weather


  • Hot Summers
  • Lots of bugs
  • High crime rates in some areas

6. Tennessee

  • Cost of living index: 89.0
  • Median household income: $54,665
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With a cost of living of 89.0, Tennessee is the sixth cheapest state to live in. Housing costs are 21% lower than the national average, with a single-family home costing $230,253. Tennessee also boasts of the lowest healthcare and transportation costs. A typical household can spend around $256 per month on utilities.

But, living in Tennessee has some drawbacks, including a high crime rate in the East South Central Region. The poverty rate is also alarming, coupled with low wages.


  • No state income taxes on earned wages
  • Low housing costs
  • Low unemployment rate
  • Conducive weather conditions


  • Heavy traffic due to expanding cities
  • High poverty rate

7. Missouri

  • Cost of living index: 89.8
  • Median household income: $61,901
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Ranking the seventh cheapest state to live in, Missouri has a cost of living index of 89.8, which is 20% lower than the national average. Housing costs are typically low, with a single-family home costing around $194,226. In addition, Missouri has a minimum wage of $11.15, which is relatively high compared to other states’ required minimum wage.

One downside of living in Missouri is the high crime rate. Plus, it has hot summers and frequent tornadoes.


  • Low housing costs
  • Good economy and job market
  • High living wage


  • Significantly high crime rate
  • Severe weather

8. Iowa

  • Cost of living index: 89.9
  • Median household income: $68,469
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With a score of 89.9, Iowa ranks eighth cheapest state to live in. Besides the cost of living, other costs like transportation, grocery, utilities, and health are generally low. The median price of a single-family home in Iowa is roughly 167,036. Iowa also has a good education system and a stable economy. Besides, the state has a 9.1% poverty rate, lower than the national average.


  • Low housing costs (24% lower than the national average)
  • High education system rankings
  • Ranked the best state to live in 


  • Harsh winter seasons
  • No major sports
  • It’s landlocked

9. West Virginia

  • Cost of living index: 90.5   
  • Median household income: $51,615
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The Appalachian state is one of the states with low housing, transportation, and healthcare costs in the country. With approximately $117,639, you can be a homeowner in this beautiful state. The housing prices are 21.4% below the national average.

Despite the fair housing prices in this state, it has frequently been listed as the worst state to live in because of poor economic growth and the education system. Plus, it has the highest poverty rate, with roughly a 16% of the residents living below the poverty line.


  • Relatively low housing costs
  • Enjoy all four seasons
  • Appalachian landscape


  • High poverty rate
  • Competitive job market
  • Consistently ranked as the worst state to live in

10. Indiana

  • Cost of living index: 90.6
  • Median household income: $66,360
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Indiana is among the cheapest states to live in throughout the country. All expenses are 10% lower than the national average — for example, housing prices in Indiana rank as the eighth cheapest nationwide. The median home price for a single-family home is around $185,805. In addition, Indiana has the lowest unemployment rate.


  • Low unemployment rate
  • It ranks the eighth cheapest state when it comes to housing costs.


  • Lack of diversity
  • Cold and snowy winters
  • High rate of drug abuse and addiction

11. Arkansas

  • Cost of living index: 90.9
  • Median household income: $49,475
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With a cost of living index of 90.9, Arkansas is another affordable state to live in. Housing and transportation costs are also low. For example, a single-family home in Arkansas costs $153,263, lower than the national average.

While Arkansas is fun to live in due to its great food and lush parks, it has some downsides, such as substandard healthcare and a struggling education system. Besides, Arkansas has the highest poverty rate, standing at 16.08%.


  • Low housing and transportation costs
  • Low property taxes
  • Nice weather and lots of outdoor activities


  • High poverty rate
  • High sales taxes
  • Poor healthcare and education system

12. New Mexico

  • Cost of living index: 91.0
  • Median household income: $51,243
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Another affordable state to live in within the U.S. is New Mexico, with a cost of living index of 91.0. If you think of expenses such as groceries, housing, transportation, and healthcare, you can expect to pay less in New Mexico than in other expensive states.

The median household income in New Mexico is $51,243 for a family of four. However,  New Mexico has the highest poverty rate, with 18.55% of its residents living below the poverty line.


  • Overall low cost of living in many sectors
  • An abundance of natural beauty
  • Plenty of good food and wine


  • High poverty rate
  • A struggling economy and fewer job opportunities
  • Poor quality education system
  • High crime rate in some areas

13. Ohio

  • Cost of living index: 91.3
  • Median household income: $58,116
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Ohio is the 13th cheapest state in the U.S. With a cost of living index of 91.3, housing, transportation, groceries, and utilities are all below the national average. The median price of a single-family home in Ohio is around $151,400.

Ohio has plenty of natural beauty, which allows for outdoor recreation. However, the Buckeye state has a high poverty rate (13.62%), lower than that of Arkansas and New Mexico, and high crime rates in some areas.


  • Affordable housing and transportation
  • Favorable weather
  • Plenty of outdoor activities


  • Harsh and unpredictable weather
  • High poverty in some areas
  • High crime rate in specific regions

14. Michigan

  • Cost of living index: 91.3
  • Median household income: $59,234
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If you choose to move to Michigan, you will enjoy various benefits, like affordable housing and great outdoor opportunities, including hiking, mountain biking, and camping. National parks and beautiful lakes are also in plenty.

However, transportation costs can be expensive in Michigan as it’s above the national average. Plus, winters are brutal, so be prepared for this when considering relocating to Michigan. At least 13.71% of the residents live below the poverty score.


  • Affordable housing
  • Various outdoor activities
  • Enjoy all the four seasons


  • High cost of education
  • High transportation costs

15. Texas

  • Cost of living index: 92.1
  • Median household income: $63,826
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Texas is another fairly cheap state where you can consider moving if you want an affordable cost of living.

Texas is the 15th cheapest state to consider. The Lone Star State has several employment opportunities in metropolitan areas and a stable economy. Housing, transportation, and groceries costs are also below the national average. However, utilities can be pretty expensive in Texas. The overall poverty rate stands at 14.22%, which is lower compared to other states.


  • Strong economy
  • Beautiful outdoor spaces
  • No income taxes


  • High taxes on sales and property
  • Potential for severe weather

Final Thoughts

A time comes when you feel that you need a change in environment and move from where you are to a new place. It could be due to the high cost of living, looking for a new job, or readjusting your goals altogether.

If, for instance, you aim to scale down your monthly expense, then you have no option but to move to a cheaper state.

Before making any relocation decisions, you want to consider several factors, such as affordable housing, home prices, job prospects, quality of education, access to healthcare, and personal preferences alongside affordability.

Josh Dudick

Josh is a financial expert with over 15 years of experience on Wall Street as a senior market strategist and trader. His career has spanned from working on the New York Stock Exchange floor to investment management and portfolio trading at Citibank, Chicago Trading Company, and Flow Traders.

Josh graduated from Cornell University with a degree from the Dyson School of Applied Economics & Management at the SC Johnson College of Business. He has held multiple professional licenses during his career, including FINRA Series 3, 7, 24, 55, Nasdaq OMX, Xetra & Eurex (German), and SIX (Swiss) trading licenses. Josh served as a senior trader and strategist, business partner, and head of futures in his former roles on Wall Street.

Josh's work and authoritative advice have appeared in major publications like Nasdaq, Forbes, The Sun, Yahoo! Finance, CBS News, Fortune, The Street, MSN Money, and Go Banking Rates. Josh currently holds areas of expertise in investing, wealth management, capital markets, taxes, real estate, cryptocurrencies, and personal finance.

Josh currently runs a wealth management business and investment firm. Additionally, he is the founder and CEO of Top Dollar, where he teaches others how to build 6-figure passive income with smart money strategies that he uses professionally.